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Winners and losers in China’s next decade
Aggregated Source: China Challenges

Micheal Pettis says:

Here are four predictions about the ways China’s rebalancing will affect the global economy:

1. The price of hard commodities will drop sharply. China consumes a disproportionate share of the world’s hard commodities, such as aluminum, copper, and iron ore. Adjusted for GDP, the country buys four to ten times as much of these commodities as the rest of the world does, and its appetite has driven most of the global increase in commodity demand during the past two decades. That demand is a direct consequence of the country’s growth-through-investment approach, which is far more commodity than consumption-intensive.

2. Industries that profit from building infrastructure or manufacturing capacity will suffer. Rebalancing will sharply reduce the growth of aggregate spending on construction equipment, heavy manufacturing, transportation, and other sectors that have historically benefited from China’s explosive surge in investment. Among these sectors, however, government policy will influence which will suffer more and which less.

3. Companies that produce consumer goods will be marginally affected overall, while specific sectors will do much better or worse.

4. Countries, especially developing ones, that rely heavily for growth on manufacturing will benefit

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